Archives of “Li Li (badminton)” tag

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EU summit – one of the ‘frugals’ appear ready to accept a deal

  
  Analysis
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Denmark reportedly ready to accept 400bn EUR in grants. Headline via Bloomberg.

Denmark is one of the frugal that were earlier holding out for 350bn EUR in grants. The full package is 750bn EUR, so that would leave 400bn in loans. Denmark is reportedly ready to accept 400bn in grants and 350bn in loans.
The frugals are:
  • Netherlands,
  • Austria,
  • Denmark
  • and Sweden
This is a positive input for EUR … deal edging closer. No word from the other 3 as yet though. And the deal would need agreement of all 27 EU leaders.

How expectations will destroy you.

  
Analysis, Education
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ExpectationsIt is easy to see others around you that are successful and just see two points.  Where you are and where they are.  It is easy to miss or skip what took place between.  Everyone would rather fly from New York to LA than drive.  If you look at trading as driving that distance chances are you are not going to have the time, money, or patience to do it. However, you have to get in a car to get to the airport.  How long that drive is ultimately up to you.

Getting off on the right foot.

Many traders get in the car not knowing where they are going.  Some of the time it leads them to the airport.  Most of the time it leads them in the complete opposite direction.  The do not know what they do not know. Chances are during this period they have had enough moments of success to keep them going. That amount of time, energy, and money was used to find out what they do not know.  Only they did not realize that or refuse to realize that.

Now what?

It is time to own your mistakes.  You can tell by the money and time that you burnt up that you made a mistake. If you try to make it all back at the wrong moments than the hole will get bigger.  This time you paid to learn what you already know.  Insert definition of insanity here.  Doing the same thing expecting different results.  Once again, you are at the cross roads and once again it is up to you.

  • Own your mistakes
  • Learn from them
  • Make them cost you less
  • Divide and conquer your losses
Moving on.

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Quick Compilation of Market Crashes

  
Analysis, Education
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With the current liquidity/credit crisis, I thought it will be interesting to take a look at past crashes. Here’s a quick compilation (not comprehensive):

  • 1901 – 1903 (17 Jun 1901 – 9 Nov 1903) – 46.1% drop in DJIA.
  • 1906 – 1907 (19 Jan 1906 – 15 Nov 1907) – 48.5% drop in DJIA.
  • 1916 – 1917 (21 Nov 1916 – 19 Dec 1917) – 40.1% drop in DJIA.
  • 1919 – 1921 (3 Nov 1919 -24 Aug 1921) – 46.6% drop in DJIA.
  • 1929  (3 Sep 1929 – 13 Nov 1929) – 47.9% drop in DJIA. Kicked off the great depression.
  • 1930 – 1932 (17 Apr 1930 – 8 Jul 1932) – 86% drop in DJIA.
  • 1937 – 1938 (10 Mar 1937 – 31 Mar 1938) – 49.1% drop in DJIA.
  • 1973 – 1974 (11 Jan 1973- 6 Dec 1974) – 45.1% drop in DJIA.
  • 1987 – Black Monday (19 Oct 1987)
  • 1989 – Friday the 13th mini crash (13 Oct 1989)
  • 1990 – Savings & Loans collapse.
  • 1997 – Asian financial crisis (27 Oct 1997)
  • 1998 – Long Term Capital Management
  • 2000 – 2002 (15 Jan 2000 – 9 Oct 2002) – 37.8% drop in DJIA.
  • 2002 Summer – freezing up of corporate credit

Former Fed chairs Yellen and Bernanke give Congress views on Covid 19 in response to the economic crisis

  
  Analysis
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Former Fed chair’s testify on Covid 19 in response economic crisis

Former Fed chair’s Janet Yellen and Ben Bernanke are testifying to Covid 19 and response to economic crisis. There comments are appearing on the Brookings institute blog
  • in many respects this recession is unique
  • forecasting recovery is difficult
  • controlling the spread of the virus must be 1st priority for restoring more normal levels of economic activity
  • members of Congress, local leaders and other policymakers need to do all they can to support testing and contact tracing, medical research and sufficient hospital capacity.
  • They must work to ensure that businesses, schools and public transportation have what they need to operate safely
  • pace of recovery could be slow, uneven
  • the longer the recession last the greater the damage will reflect on household and business balance sheets
  • the depth of the recession may leave scars
  • depending on the course of the virus, some restructuring of the economy may be needed
  • Fed likely to give a for guidance on the lift off
  • the yield curve control possible, not certain
  • the financial system is in much better shape today than it was during the financial crisis
  • new same as measured by Congress are necessary including a comprehensive plan to support medical research, testing, contact tracing and hospital capacity, enhanced unemployment insurance should be extended, and Congress should provide substantial support to state and local governments
The full report can be found HERE

Major US indices end the session with mixed results

  
Analysis, US Market
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Get an offer for fulltime employment after completing my second internship on Wall Street this summer. They need more women in charge!Dow industrial average down for the 2nd consecutive day

The major US stock indices are ending the session with mixed results.  The gains were led by the S&P index. The Dow industrial average fell for the 2nd consecutive day. The S&P index close week just below the year end closing level of 3230.78. It is still down -0.19% on the year

The final numbers are showing:
  • S&P index, up 9.18 points or +0.29% at 3224.75
  • NASDAQ index, up 29.36 points or 0.28% at 10503.19
  • Dow industrial average, down -62.25 points or -0.23% at 26672.40
For the week, the Dow led the way, while the NASDAQ index ended the week in the red. The final numbers are showing:
  • S&P index, up 1.25%
  • NASDAQ index, down -1.08%
  • Dow industrial average, up 2.29%
For the year, the NASDAQ index is the runaway leader. In fact it’s the only major indices in North America and Europe and is higher. The Shanghai CSI 300 is the only major indices higher on the year (up 10.94%). In the US the year-to-date numbers are showing:
  • S&P index, -0.19%
  • Dow industrial average -6.54%
  • NASDAQ index up 17.06%

IMF cites important risks to the outlook for US economy

  
  Analysis
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IMF on the US.

The IMF is out with a series of headlines on the US economy as the coronavirus risks increase.  They say:

  • Cites important risks to outlook for US economy including resurgence in coronavirus cases, systematic increase in property
  • Significant increase in US debt levels creates vulnerabilities; sees risk of extended period of low or negative inflation
  • Repairing US economy will take prolonged period, further policy efforts needed to boost demand, support most vulnerable
  • US should reverse existing trade barriers, tariff increases that are undermining stability of global trade
  • US treatment of undervalued currencies as countervailable subsidy poses significant risk to global trading system
  • Sees areas where US financial oversight could be tightened to further mitigate systematic risks
  • US financial system has proven resilient, but crisis at early state and banks should continue to restrain capital distribution plans
The statements do not give a warm fuzzy feeling

The Richest Man in Babylon Rules

  
Analysis, Education
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the richest man in babylonThe Richest Man in Babylon is a great little personal finance book set as an ancient fictional tale that explains the ‘The Seven Cures to a Lean Purse’ and ‘The Five Rules of Gold’.

The Seven Cures to a Lean Purse:

  1. Start thy purse to fattening. Pay yourself first. Save money before you pay any bills.
  2. Control thy expenditures. Don’t spend every penny you make or you will be broke no matter how high your income becomes.
  3. Make thy gold multiply. Invest capital in assets that go up in value.
  4. Guard thy treasures from loss. Your number one priority is to keep your investment capital safe from loss.
  5. Make of thy dwelling a profitable investment. Buy a home in the right location as a hedge against inflation and to create equity and ownership over the long term.
  6. Insure a future income. Convert your earned income into assets that can create future case flow.
  7. Increase thy ability to earn. Grow your earning power through education, building skills, gaining experience in a field, or promotions to higher levels of responsibility.

The Five Laws of Gold:

  1. Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family. Save 10% of your income each time you are paid and convert it to investment capital.
  2. Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field. Invest your capital for growth and compounding.
  3. Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling. Find a successful model or system to copy for investing your money.
  4. Gold slippeth away from the man who invests it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep. Never put money in something you don’t fully understand.
  5. Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment. This fastest way to go broke is to try to get rich quick.

Global recovery unlikely to be v-shaped, says Shell chief

  
Analysis, Crude
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The head of Shell spoke in an online interview, in a nutshell said that there will be no V-shaped recovery for the global economy after the coronavirus epidemic

  • this will  curtail oil and gas demand for years to come
Ben van Beurden, Chief Executive of Royal Dutch Shell:
  • “Energy demand, and certainty mobility demand, will be lower even when this crisis is more or less behind us. Will it mean that it will never recover? It is probably too early to say, but it will have a permanent knock for years”
  • “It is most likely not going to be a v-shaped recovery.”
  • Shell & others have had to reduce spending sharply, postpone investment and will continue to do so “for some time to come”
via Reuters
The head of Shell spoke in an online interview, in a nutshell said that there will be no V-shaped recovery for the global economy after the coronavirus epidemic

Coronavirus – Fauci says an antibody could be ready by fall

  
  Analysis
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Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci spoke with (wait for it)  Facebook CEO Mark Zuckerberg in a YouTube event.

Some of Fauci’s remarks (via Bloomberg):
  • COVID-19 is very different from the severity of the 1918 virus
  • Monoclonal antibody drug could be ready for use by fall
  • No signs that face masks could cause harm to people
Director of the National Institute of Allergy and Infectious Diseases Dr. Anthony Fauci spoke with (wait for it)  Facebook CEO Mark Zuckerberg in a YouTube event.
A little more on his timing remark …
  • by mid-to-late fall, early winter, we’ll know whether we have candidates that are safe and effective, and I hope and anticipate that we will have one or more.
  • If that’s the case, by the end of this year, beginning of 2021, we may have one or more candidate that is actually safe and effective. That being the case we can start distributing doses widely at that time.

Texas coronavirus cases up >10k on Thursday, record deaths in one day

  
  Analysis
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COVID-19 numbers published from Texas for the preceding 24 hours

  • New cases +10,291 bring the total to 292,656. This is the fourth highest single day increase. If there is a positive to be gleaned maybe 4th biggest is it?
  • The death toll however has gained at a record pace, for a second consecutive day, up 129 to a total of 3,561
  • Hospitalisations down 14, down for a second consecutive day – again trying to gather some positive signs, this is one
COVID-19 Texas coronavirus
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